The following data have been taken from the budget reports of Brandon company, a

Question

The following data have been taken from the budget reports of Brandon company, a merchandising company.

Thirty percent of purchases are paid for in cash at the time of purchase, and 35% are paid for in each of the next two months. Purchases for the previous November and December were $260,000 per month. Employee wages are 15% of sales for the month in which the sales occur. Selling and administrative expenses are 25% of the following month's sales. (July sales are budgeted to be $330,000.) Interest payments of $17,000 are paid quarterly in January and April. Brandon's cash disbursements for the month of April would be:

Help! Please show your work and try to explain it!

Purchases Sales January $270,000 $210,000 February $270,000 $310,000 March $270,000 $350,000 April $250,000 $410,000 May $250,000 $370,000 June $230,000 $350,000

Explanation / Answer

January February March April May June Purchase $270,000 $270,000 $270,000 $250,000 $250,000 $230,000 Sale $210,000 $310,000 $350,000 $410,000 $370,000 $350,000 Cash Disbursement Purchase Expenses At the time of Purchase $ 81,000.00 $ 81,000.00 $ 81,000.00 $ 75,000.00 $ 75,000.00 $ 69,000.00 In the following Month $ 91,000.00 $ 94,500.00 $ 94,500.00 $ 94,500.00 $ 87,500.00 $ 87,500.00 In the 2nd following Month $ 91,000.00 $ 91,000.00 $ 94,500.00 $ 94,500.00 $ 94,500.00 $ 87,500.00 Employee Wages $ 31,500.00 $ 46,500.00 $ 52,500.00 $ 61,500.00 $ 55,500.00 $ 52,500.00 Selling & Distribution Expenses $ 77,500.00 $ 87,500.00 $ 102,500.00 $ 92,500.00 $ 87,500.00 $ 82,500.00 Interest Payment $ 17,000.00 $ 17,000.00 Total Cash Disbursement $ 389,000.00 $ 400,500.00 $ 425,000.00 $ 435,000.00 $ 400,000.00 $ 379,000.00 Brandon's cash disbursements for the month of April would be: $435,000

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